M/S Tata Engineering & Locomot vs The Presiding Officer & Ors on 4 July, 2013

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Jharkhand High Court

M/S Tata Engineering & Locomot vs The Presiding Officer & Ors on 4 July, 2013

Bench: Aparesh Kumar Singh

                             C.W.J.C No. 2886 of 2000 (R)
            An application under Article 227 of the Constitution of India
                          --------

M/s. Tata Engineering & Locomotive Company Limited .... Petitioner.

-Versus-

The Presiding Officer, Labour Court, Jamshedpur & anr.. ...Respondents.

For the Petitioner : M/s. Vijoy Pratap Singh, Sr. Adv.

& Ashok Kumar Sinha, Adv.

     For the Respondents           : M/s. K.B. Sinha, Sr. Adv.
                                   S.L.Agarwall, Amitabh, Ads.

For the Respondent No.2 : M/s. K.B.Sinha, Sri. Adv.

S.L.Agarwal, Adv.

                                    PRESENT
            HON'BLE MR. JUSTICE APARESH KUMAR SINGH

By Court            Heard learned counsel for the parties.

The order dated 26th May, 2000 passed by the learned Presiding Officer, Labour Court, Jamshedpur in B.S.E. Case No. 1 of 1989 under Section 26 of the Bihar Shops & Establishment Act, 1953 (hereinafter referred to as the Act, 1953), directing the writ petitioner to reinstate the complainantrespondent no.2 with full back wages and consequential benefits, is under challenge by the Managementemployer in the present writ application.

The impugned order has been challenged mainly on two grounds. First ground is that on the basis of materials adduced during the course of the proceeding before the learned Labour Court in B.S.E. Case No. 1 of 1989, the instant complaint made by the respondent no. 2 is not maintainable under the Bihar Shops & Establishment Act. The reason for the same is that the respondent no.2complainant comes within the definition of worker within the meaning of Section 2(l) of the Factories Act, 1948 and, therefore, excepted from the definition of an employee as defined under the Act of 1953 under Section 2(4) of the said Act.

The second ground to assail the impugned order on behalf of the Management is that even if the complainant is held to be an employee in the Factory and not a worker within the meaning of Factories Act, 1948, as per the definition of employee under Section 2(4) of the Act of 1953, he is, however, outside the purview of the said definition as he falls within the category of persons excepted under Section 4 read with Schedule1(5) being a person occupying position of Managerial or Supervisory character in the Establishment.

The arguments made on behalf of the petitioner have proceeded to justify the aforesaid two grounds raised for challenging the impugned order. Some short facts are necessary to appreciate the controversy. On 5th September, 1959, the complainant was appointed as a Fitter as per letter of his appointment contained at Annexure5 to the writ petition. His employment was governed by the Standing Order of the Company in force from time to time. In the year 1988, the petitioner was working as Assistant Manager in Forge Division of the petitioner company. The order of discharge dated 29th July, 1988 was issued showing loss of confidence on the person concerned, which is part of Annexure5 being photocopies of the documents produced by the Management. On 9th January, 1989, the complainant applied and received final settlement of his dues. On 24th January, 1989, he filed a complaint petition under Section 26(2) of the Act of 1953 before the concerned Labour Court. The complainant's date of birth as recorded in the service record of the employer was 15th January, 1949 as per which he would have reached the age of superannuation in 2009 on attaining 60 years of age as per the Standing Orders. Upon lodging of such complaint, the complaint petition (Annexure2) to the writ application, the Management appeared on notice and filed a show cause which is Annexure3 to the writ application, taking the aforesaid pleas. Thereafter on conclusion of proceedings after adducing of evidence and material exhibits on the part of the rival parties the impugned order has been passed on 26th May, 2000.

Learned counsel for the Managementpetitioner has taken this Court to the definition of employee as defined under Section 2(4) of the Act of 1953, which is quoted hereunder:

"'employee" means a person wholly or partially employed for hire, wages including salary, reward, or commission in and in connection with any establishment and includes 'apprentice' but does not include member of the employer's family. It also includes person employed in a factory who are not worker within the meaning of the Factories Act, 1948 (63 of 1948), and for the purpose of proceeding under this Act, include an employee, who has been dismissed, discharged or retrenched for any reason whatsoever"

He has also taken this Court to the definition of worker as defined under Section 2(l) of the Factories Act, 1948, which is also quoted hereunder:

"worker" means a person [employed, directly or by or through any agency (including a contractor) with or without the 3. knowledge of the principal employer, whether for remuneration or not], in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process [ but does not include any member of the armed forces of the Union}"

The learned Labour Court framed four issues for determination, which are quoted as hereunder:

i) Is the complaint petition filed by the complainant is maintainable before this Court?

ii) Is the authority who has passed the termination order and terminated the service of the complainant is competent to pass the same?

iii) Is the termination of service of the complainant is proper and justified?

iv) Is the complainant entitled for reinstatement in service with full back wages and other benefits?

Learned counsel for the petitioner has also taken this Court to the various depositions contained at Annexures6 to 8 being that of the management's witnesses in support that the complainant was working in a supervisory capacity in the factory were approximately 165 workmen were also working at the relevant point of time. Certain material exhibits have also been referred to, which according to the petitioner, shows that he had been discharging his duties of managerial/ supervisory in nature by making allotment of jobs, recommendation for leave, recommendation for promotion, appraisal report of subordinate employees etc. Learned senior counsel for the petitioner after referring to the aforesaid evidence and also discussion made in respect of issue no. 1 relating to the maintainability of the complaint petition, submits that the learned Labour Court arrived at a finding, on the aforesaid issue, that the complainant is an employee and not a worker as conceived under the definition of Factories Act. He further submits that evidence adduced before the learned Labour Court shows that the complainant was engaged in the Forge Division which comes within the definition of Factory as defined under Section 2(m) and he was also working within the precincts of the factory premises where such manufacturing process and other works were carried out. Therefore, the learned Labour Court 4. was clearly in error in arriving at a finding that the complainant was not a worker as conceived under the Factories Act, 1953.

Learned senior counsel appearing on behalf of petitioner in the alternative submits that even though the complainant may be held to be an employee as defined under the Act of 1953, but he fell within the exception provided under Section 4 read with Schedule1(5) of the Act of 1953, as he was working in a managerial capacity according to own admission. He has referred to the complaint petition paragraph 3 in support as also the reference made to his Grade i.e. M5Grade, in the discussion of Issue no. 2 by the learned Labour Court, when he had challenged the capacity of the General Manager himself to issue the order of discharge being not the competent authority. It is, therefore, submitted on his behalf that the complainant even in the alternative did not come within the scope of employee who could maintain an application under Section 26 of the Act of 1953 and the impugned order therefore seriously suffers on that account. Learned senior counsel also submits that the events preceding to the order of discharge had given reasonable cause to the employer in arriving at a decision to discharge the complainant for loss of confidence. According to the terms of the Standing Order he was given salary of one month in lieu thereof and discharged without any stigma or finding of misconduct attached thereto. Therefore, there was no requirement of disciplinary proceeding as has been urged on behalf of the complainant before discharging him. Lastly, learned senior counsel has submitted that when the employee has been discharged on account of loss of confidence it was not proper for the Labour Court to direct his reinstatement. At best compensation could have been awarded in lieu thereof.

Learned senior counsel appearing on behalf of respondent no.2 complainant, on the other hand, has taken this court to the deposition of complainant which is on record. According to him, it was clear case of the complainant that he was working in the Forge Division at the relevant point of time in October, 1988 and after considerable number of years of service he has been removed from service, apparently on allegations which are sufficient to create a stigma against him and for which a proper departmental inquiry was only the recourse before he could have been terminated or removed from service. The order of discharge is therefore malafide and employed only to get over the procedure prescribed for holding departmental inquiry in which the employee could have enough opportunity to defend himself for the 5. reasons, which had formed the basis for loss of confidence in the employer to discharge him.

Learned senor counsel has relied upon the judgment of Hon'ble Supreme Court reported in (1985) 2 SCC 727 in the case of Chandu LalVs. Management of M/s. Pan American World Airways Inc. He submits that when the termination is upon ground of loss of confidence then it attaches stigma, for which necessary condition precedent is initiation of a disciplinary proceeding for the alleged acts of misconduct before any order of termination can be passed, as it amounts to a punishment.

In the instant case, admittedly he has been discharged on the ground of loss of confidence and therefore it amounts to stigma and has been done without recourse to departmental proceeding, therefore, is bad in law. Learned senior counsel has taken this Court to the discussion made by the learned Labour Court while arriving at a finding in respect of the Issues nos. 1, 2 and 3. It is submitted on his behalf that the learned Labour Court rightly came to a finding the complainant was not a worker within the meaning of Factories Act and therefore comes within the definition of employee under the Act of 1953.

Learned Labour Court after discussion of the entire evidences has also rightly concluded that the General Manager was not the competent authority to discharge him as he was working on the post of Assistant General Manager in Grade5 at the relevant point of time and therefore the discharge order is bad on that account as well. On the aforesaid submissions, he again reiterates his submission that the discharge without any disciplinary inquiry or chargesheet issued against the petitioner is bad in law and therefore the impugned order does not suffer from any error and has found the conduct of the Management not proper in the eye of law. However, he fairly submits that the complainant having crossed the age of superannuation now, at best can be entitled to compensation only, for which sufficient guidelines have been provided by Hon'ble Supreme Court in the case of O. P. Bhandari, Appellant v. Indian Tourism Development Corporation Ltd. and others, Respondents reported in AIR 1987 SC 111.

I have heard learned counsels for the parties at length and gone through the materials on record including the impugned order. Challenge to the impugned order proceeds on two grounds, which have been referred to in the earlier part of this judgment on behalf of the 6. Management petitioner. The evidence which has been adduced on behalf of the Management has been referred to at Annexures6 to 8 coupled with exhibits which have also been referred to as part of the record along with depositions of the workman himself. On the face of the materials it gives an impression that the complainant was engaged in a managerial/supervisory capacity, though within the precincts of the petitioner's factory in the Forge Division. The definition of worker as defined in Section 2(1) of the Factories Act, which has been quoted hereinabove, is a 'means' definition and not an exhaustive 'means and inclusive' definition. Perusal of the same indicates that the employee concerned is to be associated in the manufacturing process one way or the other in the precincts of the factories. Apparently the evidences which have been led by both the parties show that the complainant was not exactly working in the manufacturing process, but had been engaged in the capacity of supervisory/managerial job including making allotment of jobs, recommendations for leave, recommendation for promotion, conducting appraisal report of subordinate employees etc. Even the workman has deposed that he was working as Assistant General Manager in Grade M5 in the said factory premises. The finding of the learned Labour Court arrived at Issue no. 1 in respect of maintainability of the complaint under the Act of 1953 on the specific ground raised by the management as referred to above therefore cannot be faulted. The complainant definitely did not fall within the purview of worker under the Factories Act as defined under Section 2(1).

This leads me to the next question whether the complainant even though he came within the definition of employee as defined under Section 2(4) of the Act of 1953 was falling within the exception laid down under Section 4 read with Schedule1(5) of Act of 1953 . On this issue, it is important to refer to the statements made in the complaint. At paragraph 3 thereof the complainant himself has stated that he received promotion from time to time and finally he was elevated to the post of Assistant Manger in Forge Division and was working as such on 27th October, 1988 when he was discharged. His deposition at Annexure4, more specifically at paragraph 6 is also to the effect that he was working as Assistant General Manger under the petitioner's company at the relevant point to time. The opposite party no.2/management had also taken a specific plea in the written statement filed before the learned Labour Court that the complainant even assuming falls within the definition of employee under the Act of 1953 is excluded because of the 7. exception provided under Section 4(2) read with Schedule 1 Entry 5 of the Act of 1953. The other evidences, which have been brought on record in the nature of deposition of management's witnesses as also exhibits adduced by the management show that the workman had been discharging the duties in a supervisory or managerial capacity. In fact, in the discussion in respect of Issue no. 2 relating to the capacity of the General Manager to discharge him, the learned Labour Court has also taken into account that he was working in M5 Grade. This is a substantive post/grade in the hierarchy of the Managers and the complainant had categorically made an allegation that a person in the rank of General Manger was not competent to remove the complainant. In these circumstances, the findings which are on record produced by either of the parties therefore show that the complainant was serving in a managerial/supervisory capacity and came within the exception provided under Section 4(2) read with Schedule 1 (5) of the Act of 1953. Learned senior counsel for the complainant has made a submission that it was for the management to show that the said post of managerial/supervisory was within 10% of the total number of employees in the establishment. This issue had specifically been raised by the management in their written statements, and in the wake of admission of the complainant himself relating to his capacity as Assistant General Manager in the petitioner's company, the onus lay upon the complainant to show that he was not within the 10% of the total number of employees engaged in an Establishment falling within the category of managerial/supervisory employee. On this issue therefore, the findings of the learned Labour Court, arrived at Para14 of the impugned judgment/order is clearly in error which goes to the root of the matter.

The complainant had originally been employed as a Fitter and the appointment letter was issued by the Labour Officer of the petitioner's company at the relevant point of time. During the course of his career he had achieved number of promotions, admittedly as stated by him and had reached the rank of Assistant General Manger. The management during the course of proceeding had produced materials to show that the Chairman and Managing Director had delegated the powers upon other Directors and Executives of this Company which also included power to terminate the service of the employee. In these circumstances, the order of discharge issued by the General Manager against the 8. complainant, who had originally been appointed by the Labour Officer, therefore also cannot be fault on that account.

In the totalities of the facts and circumstances and the reasons discussed hereinabove, therefore, the impugned order holding the complainant an employee under the Act of 1953 and not falling within the exception provided under Section 4(2) read with Schedule1 (5)of the said Act is not proper in the eye of law and therefore warrants interference in exercise of judicial review by this Court.

The findings on the instant issue which are in the nature of mixed question of law and facts and are relatable to the very question whether complainant concerned came within the purview of employee or was falling within the exception as provided under Section 4(2) of the Act of 1953. Therefore they go to the root of the matter which has rendered the impugned order bad in law. The consequent order of reinstatement and grant of consequential benefits with full back wages therefore cannot be sustained in the eye of law. Since the complainant has been found to be falling within the exception of Section 4(2) read with Schedule 1(5)of the Act of 1953, therefore the question relating to the loss of confidence and the requirement of a disciplinary proceeding before his termination as conceived under Section 26(2) of the Act of 1953 is also alien for determination of the issues raised by the complainant. The complainant having fallen within the exception under Section 4(2) of the Act of 1953 therefore could not have raised his grievance under Section 26 of the said Act in relation to nonconduct of disciplinary proceeding before issuance of order of discharge.

Accordingly, the writ petition is allowed and the impugned order dated 26th May, 2000 is quashed. However, no orders as to costs.

(Aparesh Kumar Singh,J) Jharkhand High Court, Ranchi The 4th July, 2013 jk/NAFR

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